The Labor Department's report showed the economy added tens of thousands more jobs than anticipated and the unemployment rate fell from 7.9 percent to 7.7 percent, its lowest level since December 2008.

That suggests the economy is recovering steadily, though concerns remain over U.S. politicians' ability to reach a budget deal to avoid the so-called "fiscal cliff," a mix of tax increases and spending cuts due to kick in next year.

Concern that a deal may not be reached in time appears to be weighing on consumer confidence — a University of Michigan index showed it fell sharply in December to a four-month low.

France's CAC-40 closed up 0.1 percent to 3,605.6, while Britain's FTSE 100 climbed 0.2 percent to 5,914.4. Only Germany's DAX slipped — 0.2 percent to 7,517.8 — on the back of weak industrial production figures and a downbeat economic forecast from the country's central bank.

Major U.S. indexes rose on the open before the consumer confidence figures tempered their rise. By afternoon in New York, the Dow Jones industrial average was up 0.4 percent at 13,123, while the S&P 500 was flat at 1,414.

Developments in the U.S. budget talks have steered markets in recent weeks and are likely to do so until the end of the year, by which time a deal is expected to be reached.

"It seems investors are also cautious about taking on too much risk ahead of the weekend as the markets have still not heard much news on U.S. policy officials' progress regarding the fiscal cliff," said Shavaz Dhalla, a trader with Spreadex.